Global M&A Trends Survey Report (2024-2025)

Capstone Partners & IMAP Survey Finds Easing Recession Fears, Robust Private Equity Activity Drives Strong 2025 M&A Market Outlook

Capstone Partners and IMAP have released their 2024-2025 Trends in Global M&A Survey Report, with insights from M&A advisors across the world. This report combines Capstone’s in-depth investment banking knowledge with proprietary data obtained from 100 participating IMAP M&A advisors across 54 countries. Capstone and IMAP surveyed M&A advisors between September 19, 2024, and November 5, 2024. The full report, available for download below, provides insight into M&A market activity throughout 2024 and expectations for dealmaking conditions in 2025, with sections including:

1. M&A Market Conditions
2. M&A Valuation Dynamics
3. Sell-Side M&A Considerations
4. Global Economic Impacts

The report also reveals data by industry and region, highlighting significant variances.

Key Findings:

M&A Volume Expectations Improve Significantly for 2025

As M&A activity likely neared or reached its trough in 2024, the vast majority (79%) of total advisors surveyed anticipate 2025 deal flow to increase. This marks a rise of 28% year-over-year (YOY) and 50.4% compared to 2023’s initial expectations. Investment bankers’ optimism for M&A activity has largely been supported by the return of private equity acquirers, many of which were sidelined in the first half of 2024 awaiting interest rate cuts. While advisors’ expectations for 2025 transaction activity have heavily depended on their operating region, the majority of investment bankers surveyed in each geography anticipate M&A activity to increase. Of note, nearly all (97%) investment bankers surveyed in North America expect dealmaking to rise, representing an increase of 26.6% YOY. The share of advisors projecting an M&A increase also rose YOY in Latin America and Europe, the Middle East & Africa (EMEA).

Middle market M&A activity in 2024 continued to remain strong compared to the broader market. Of note, 88% of total investment bankers surveyed indicated that middle market dealmaking outperformed or remained in line with the broader market. While the percentage of advisors reporting an outperformance in the middle market fell 13% YOY, transaction activity in this market began to experience an uptick in the final quarters of 2024, as noted in Capstone’s Capital Markets Update. Industry continued to play a critical role in middle market performance. Clear winners in 2024 included the Consumer & Retail, Financial Technology (FinTech) & Services, Healthcare, and Industrial Technology industries, with the lion’s share of advisors in each of these verticals reporting that middle market M&A outperformed total activity.

Advisors’ outlook for private equity activity is increasingly bullish for 2025, as more than half (51%) of total investment bankers surveyed expect sponsor dealmaking to increase. This represents a stark rise compared to expectations for 2024 and 2023. Additionally, more than 80% of advisors in each industry projected either an increase or consistent amount of private equity activity in their respective verticals, illustrating the strength of the sponsor community across a variety of markets. Supported by elevated levels of dry powder and an easing Credit market, private equity firms are well-equipped to execute deals in 2025. In addition, limited partner (LP) demand for returns will likely spur elevated private equity acquisitions as sponsors look to put capital to work, generate returns, and accelerate future fund formation.

M&A Purchase Multiples Hold Steady in 2024, Expected to Tick Up in 2025

M&A multiples held steady on a YOY basis, with the majority (59%) of total advisors surveyed reporting that M&A purchase multiples remained the same in 2024 compared to 2023. Nearly 20% of advisors reported an increase in valuations as interest rates eased in the second half of 2024, indicating an uptick in pricing trends. Defensible industries including FinTech & Services and Healthcare continued to draw strong pricing, led by the FinTech & Services industry with an average typical multiple of 10.1x EV/EBITDA in 2024.

M&A transaction multiples are expected to tick up in 2025, with 46% of advisors surveyed anticipating a moderate rise in valuations compared to 2024. However, 49% of advisors projected little to no change in M&A multiples in 2025. Interest rate paths and acquirer appetite will likely dictate pricing trends in the coming year. Advisors showcased consistency regarding anticipated 2025 industry valuations, with the FinTech & Services and Healthcare industries expected to garner the highest average typical M&A EBITDA multiples.

Acquirers Increasingly Prioritize Recurring Revenue

Buyers have become increasingly selective in their acquisition pursuits, prioritizing target companies with robust financial visibility. Of note, 69% of total investment bankers surveyed indicated that recurring revenue was the most important characteristic to acquirers in 2024, marking an increase of 6% compared to 2023. Private equity buyers have been especially drawn to target companies with a high degree of recurring revenue as it enables sponsors to rapidly scale the business and capture a favorable return on exit. Additionally, strong operational metrics have been increasingly important to buyers in 2024 such as customer stickiness (+1% YOY), differentiated product offerings (+3%), and geographic penetration (+2%).

Realistic Valuations Remain Key to Successful Sell-Sides

Successful sell-side M&A elements closely aligned with the deal closing hinderances advisors faced throughout 2024. As sellers’ excessive valuation expectations were ranked as the most prominent hurdle in 2024, nearly all (97%) investment bankers surveyed noted setting a realistic deal valuation as very or somewhat important in achieving a successful sell-side result, up 2% YOY. Building a good buyer’s list was also identified by 97% of advisors as an important element with more than half of investment bankers attributing deal closing delays to a lack of motivated acquirers. Strong communication with the selling entity’s owner and C-Suite can also rectify a misalignment on valuation expectations and buyer interest.

Recession Fears Decline Across All Geographies

Advisors’ economic outlook continued to improve as central banks began to cut interest rates to strengthen economies. Among total advisors surveyed, only 38% expect a recession to be very or somewhat likely in 2025, down 22% YOY and 40.2% compared to 2023’s outlook. In addition, the share of advisors anticipating a recession declined YOY across every region surveyed. Of note, the share of North America-based advisors anticipating a recession in 2025 fell 33.6% YOY, marking the largest YOY drop across geographies. However, survey responses were collected prior to the U.S. Presidential election—the result of which may change advisors’ current view. Many advisors surveyed indicated that the election result would impact the likelihood of a recession. “The U.S. Presidential election poses a meaningful risk, given the executive powers of regulation. Inflation is also a concern because if it is persistent, we will see a slower pace of interest rate easing,” noted David DeSimone, Managing Director at Capstone Partners, in the survey.

Download the Full 2024-2025 Global M&A Trends Survey Report

Our full report publication includes an in-depth analysis broken down by industry and region and is available in both online and PDF formats.

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